Welcome to Extreme Investor Network, where we provide you with the latest and most insightful business news to help you make informed investment decisions. Today, we are taking a deep dive into the recent drop in sales of previously owned homes and the factors contributing to this trend.
According to the National Association of Realtors, sales of previously owned homes decreased by 4.3% in March compared to February, with a seasonally adjusted annualized rate of 4.19 million units. This marks a 3.7% decline from March 2023, following a significant increase in sales the previous month. The primary culprit behind this slowdown appears to be the rising mortgage rates, which have been on the uptrend in recent months.
The regional breakdown of the sales data reveals that sales declined across the board, except in the Northeast, where they saw a 4.2% increase month-over-month. The West experienced the sharpest drop in sales, with an 8.2% decline, despite having the highest home prices in the country.
Lawrence Yun, the chief economist at NAR, noted that while the housing market is rebounding from cyclical lows, sales are being hindered by stagnant interest rates. He pointed out that with nearly six million more jobs compared to pre-COVID levels, there is a robust pool of prospective homebuyers in the market.
Although there was a slight improvement in inventory, with a 4.7% month-over-month increase to 1.11 million homes for sale in March, home prices continued to soar. The median price of an existing home sold in March reached $393,500, a 4.8% increase from the previous year and a record high for the month of March.
As we enter the spring housing market, competition is intensifying, with homes selling faster than before. The average time a home spends on the market dropped to just 33 days in March, down from 38 days in February.
Investor activity dipped slightly in March, accounting for 15% of sales compared to 21% in February. However, first-time buyers made a notable comeback, representing 32% of sales, up from 26% the previous month. All-cash purchases also saw a slight increase, comprising 28% of sales in March.
Looking ahead, mortgage rates continue to climb, with the average rate on the 30-year fixed loan hovering around 7.5%, posing a potential challenge for prospective homebuyers. At Extreme Investor Network, we will continue to monitor these developments closely and provide you with the insights you need to navigate the ever-changing real estate market. Stay tuned for more updates and analysis on our platform.
